Dec 27 (Reuters) -ICE cotton futures crept higher on Wednesday as investors covered short positions ahead of a long holiday weekend, while a weaker dollar lent further support.

* Cotton contracts for March CTc1 rose 0.18 cent, or 0.22%, to 80.23 cents per lb at 10:36 a.m. ET (1536 GMT). It traded in a range of 79.98 and 80.76 cents a lb.

* "We are in the holiday season, we're almost to the end of the year and I think some of the short speculators are pulling out of positions, closing the books and waiting till next year," said Jack Scoville, vice president at Chicago-based Price Futures Group.

* The dollar index .DXY fell to its lowest level since July 26. A weaker dollar makes cotton cheaper for buyers holding foreign currencies. USD/

* The USDA's weekly export sales report is due on Friday, a day later than usual this week due to the Christmas holiday. EXP/COT

*Last week's report showed that exports of 222,300 running bales (RB) were at their highest level for the marketing year 2023/2024.

* Limiting gains, oil prices slipped as investors monitored developments in the Red Sea. Lower oil prices tend to subdue sentiment in cotton markets since they make polyester, a cotton substitute, less expensive. O/R

* In the grain market, Chicago wheat gave back some of the previous session's sharp gains while, soybeans and corn ticked down. GRA/

Reporting by Daksh Grover in Bengaluru. Editing by Jane Merriman